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Iran Sanctions About to Increase

The Los Angeles Times reported that the multilateral sanctions led by President Barack Obama are set to increase this weekend.

Extract from Los Angeles Times follows the jump.Over the next four days, Western governments will launch their toughest sanctions yet against Iran. The steps are designed to eviscerate the oil-based economy, and to test Tehran’s determination to keep enriching uranium in defiance of United Nations resolutions.

The United States and European Union will impose an oil embargo, as well as a ban on tanker insurance and other measures that analysts say could slash Iran’s foreign sales of oil – its largest source of revenue – by more than half.

That would cost Iran about $4 billion a month, experts say, a substantial amount given the country’s estimated foreign currency reserves of $60 billion to $100 billion.

Western governments hope the added pressure will help break the deadlock in a decade-old struggle to persuade Iran to accept limits on nuclear development – before it completes research that many nations fear is aimed at learning how to build a nuclear weapon.

In three rounds of negotiations this year, Iranian officials showed little inclination to compromise. They insist their nation’s nuclear program is for peaceful purposes.

Western officials and analysts say Supreme Leader Ayatollah Ali Khamenei may reconsider if the tightening sanctions stir unhappiness among merchants and consumers. Perhaps more important will be the squeeze on businesses and industries controlled by the Iranian Revolutionary Guard Corps, a key part of the power structure that is influential with Khamenei.

‘As time passes and dollars are lost, inevitably ordinary Iranians are going to ask the question, “Is it worth it?”‘ said Cliff Kupchan, a former State Department official now at the Eurasia Group consulting firm in Washington.

Western governments appear prepared to let the sanctions build through the summer, and even increase the pressure. In Washington, Congress is finishing legislation that would tighten sanctions further on Iran’s oil sector.